Hungary May Launch Global Bond as Early as Next Week

By

Emese Bartha and Margit Feher

Feb 1, 2013 2:59 pm CET

Hungary looks set to launch its first global bond in more than a year and a half as early as next week, taking advantage of investors’ upbeat appetite for riskier assets to show it can fund itself without relying on a bailout from the International Monetary Fund.

Hungarian officials are scheduled to finish investor meetings next Tuesday, and some market watchers say a deal may launch quickly afterwards, possibly for a size between $2 billion and $3 billion. Hungary is expected to do a dollar-denominated deal, as it did in its last similar deal in May 2011. Since then it has successfully financed itself in the local-currency market.

“I would expect them to do one or two big-ticket deals, probably totaling over $2 billion if there is demand. Hungary may offer clients a couple of maturity preferences, but the aim will be to get as much cash in the bank as early in the year as possible,” said Timothy Ash, an economist at Standard Bank.

Citigroup strategists Wike Groenenberg and Luis Costa said in a note to clients that “we believe investors will welcome the deal” as Hungary’s dollar-denominated bonds offer a reasonable return relative to other comparable countries’. The larger the transaction, the better, the bank said “as Hungary struggles with a high foreign currency debt refinancing bill”.

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